COLLG 4
The FSA's Responsibilities under the OEIC Regulations
COLLG 4.1
Introduction
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COLLG 4.1.1
See Notes
Section 262 of the Act provides for the Treasury to make regulations
governing the establishment and regulation of ICVCs. Rather than merely adopting various
parts of UK company
law, the Treasury chose a 'stand alone' approach for its OEIC Regulations. The
main features and practical effects of those regulations are outlined below.
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Applications for authorisation (Regulations 12 - 17)
COLLG 4.1.2
See Notes
(1) The FSA requires
an application for authorisation to be made by the ACD and
Depositary, who must:
(a) be persons authorised under the Act with the appropriate
permission under Part
IV of the Act (Permission
to carry on regulated activities);
(b) submit a joint application giving details of themselves, any other person proposed as a director of the ICVC;
(c) be independent of each other;
(d) provide a copy of the proposed ICVC's instrument of incorporation;
(e) a business plan;
(f) provide a solicitor's certificate to the effect that the instrument of incorporation complies
with Schedule 2 to the OEIC
Regulations and with COLL;
and
(2) The name of the ICVC must
not be undesirable or misleading and must not be the same as an existing company.
Regulation 19 includes a list of words and expressions that are prohibited
from inclusion within the name of an ICVC and
further guidance can
be found in COLL 6.9 (Ongoing obligations).
As with AUTs the
aim of the ICVC must
be reasonably capable of being achieved.
(3) As with AUTs,
the FSA has
up to 6 months to
determine a completed application, but aims to process an application within
6 weeks for UCITS schemes.
If the FSA is
satisfied with the application, an authorisation
order is issued. The ICVC becomes incorporated when the authorisation order is
issued.
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Notification of changes to ICVCs (Regulation 21)
COLLG 4.1.3
See Notes
(1) The FSA's approval is required before the following
changes can take place:
(a) any alteration to the instrument
of incorporation;
(b) any alteration to
the prospectus that would
be of significance;
(c) any reconstruction or amalgamation involving the ICVC;
(d) any proposal to wind up the ICVC otherwise
than by court;
(e) any proposal to replace a director, to appoint an additional director, or decrease
the number of directors in
post; and
(f) any proposal to replace the depositary.
(2) Any notice proposing to change the instrument of incorporation must be accompanied
by a solicitor's certificate confirming that the change will not affect
compliance of the instrument with schedule2 to the OEIC
Regulations and COLL as they relate to the contents of the
instrument.
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Revocation of authorisation (Regulation 23)
COLLG 4.1.4
See Notes
The FSA can revoke an authorisation order or refuse to revoke an authorisation order on similar grounds to those for an AUT. If it proposes to do so, similar procedures for warning notices and decision notice as for AUTs apply.
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Power of intervention (Regulation 25)
COLLG 4.1.5
See Notes
The FSA has
a power of intervention if it appears there is a breach of the Act or COLL, or it is desirable to give a direction to protect the interests of
investors in the ICVC.
Directions can be given to cease the issue or redemption of units or any class of unit in
the ICVC or
for the winding up of the ICVC.
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Corporate Code
COLLG 4.1.6
See Notes
(1) Certain provisions of the Companies Acts will apply to ICVCs, as they are incorporated
bodies (especially, but not exclusively, regarding the holding of meetings).
(2) Regulations 34 to 70 lay down the corporate code for ICVCs. The code contains
provisions dealing with the operation of ICVCs and
includes a number of general company law provisions, for example personal
liability for contracts and deeds and punishment for fraudulent trading. The
operation of an ICVC is
also governed by COLL.
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The FSA's Registration Function
COLLG 4.1.7
See Notes
In accordance with Part IV of the OEIC Regulations, the FSA is required to maintain
a register of ICVCs,
allocate to each a registered number, and carry out certain other registration
functions,
including publication in the London or Edinburgh Gazette of the issue or receipt
by the FSA of
those documents as listed in regulation 78.
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